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Investing.com -- Adecco Group on Wednesday said it aims to reduce financial leverage to 1.5 times net debt to EBITDA or lower by the end of 2027, reaffirming previously announced financial targets.
The Swiss-based recruiter, which operates across Europe, the United States, and emerging markets, maintained an EBITA margin corridor of 3% to 6% through the cycle.
Profitability stood at 3.1% in fiscal year 2024 and is on track to meet the low end of the range in FY25, the company said at a capital markets day presentation in London.
Adecco reported that net debt to EBITDA, under a revised definition including 50% equity treatment of its hybrid bond, was 2.8 times in Q4-24, 3.6 times in Q2-25, and 3.3 times in Q3-25. The group said it remains committed to lowering leverage toward its midterm target.
Revenue for Adecco remained broadly flat from 2019 through 2024, while EBIT declined by 34% over the same period.
The company noted historical volatility in profitability, which peaked at 5.2% in FY15 and reached a trough of 2.7% in FY09. Average profitability across 2007-2024 stood at 4.2%, with recent years ranging from 3.1% to 4.6% between FY19-24.
Strategically, Adecco highlighted its “Agility” framework, designed to drive commercial and operational excellence, gain market share, and support profitable growth.
The company said it aims to scale digital platforms and pursue generative and agentic AI initiatives across its operations.
Agentic AI is expected to account for more than 50% of Adecco business revenues by the end of 2026. The company also plans to leverage AI across its LHH and Akkodis divisions.
The AI strategy will be supported by r.Potential, a joint venture launched in April 2025 and backed by investments from both Adecco and Salesforce.
Jefferies maintained a “hold” rating with a price target of CHF 24, representing a 3% downside from the prior trading day’s close of CHF 24.70.
The brokerage based its target on FY25/FY26 EV/GP and EV/EBIT of roughly 1.5 times and 8 times, near the low end of historical ranges.
Morgan Stanley rated the stock “equal-weight” with a price target of CHF 25, reflecting a DCF-based valuation of CHF 30 using a WACC of 11%, terminal growth of 2%, and terminal EBITA margin of 4.1%, and an EV/EBITA target multiple of CHF 20 based on 8 times NTM EBITA.
Adecco primarily operates as a blue-collar temporary recruiter, but it also provides professional recruitment, outplacement, re-skilling, and technology consulting services.
The company emphasized continuity in its midterm guidance and financial targets while outlining initiatives to harness technology and artificial intelligence to support growth.